Dave Ramsey: Debt collectors like to play on your emotions

I got a call from a debt collector regarding $2,000 I owe in medical bills. I’m trying to get my finances in order and pay this off, but I’m afraid they’ll follow through on their threat to garnish my wages. Can you give me some advice?

Mike

Dear Mike,

First, I want you to take a deep breath and calm down. Debt collectors like to play on your emotions because they think you’ll give in and do something you can’t really afford to do. Most of them don’t care about you or your situation as long as they get some money.

They won’t garnish your wages because they can’t. They would have to go through the formal, legal procedure of first suing you and then winning the case. They broke federal law by saying they would garnish your wages but hadn’t sued you. If I were in your shoes, I’d be filing a complaint against these bozos with the Federal Trade Commission.

Don’t react with fear and panic in the face of debt collector threats. Talk to them and explain your situation. See if you can work out a compromise. If they get nasty or break federal law again, let them know you’ll be filing another complaint with the FTC. You’d be surprised how reasonable these people can be when faced with the possibility of government intervention.

In the meantime, do everything you can to scrape up as much cash as possible. Have a big garage sale and sell everything in your attic or basement you don’t need. Then, when you get this mess cleaned up, pay off the rest of your debts — if you have any — and start living on a written.

Dave

Rental house being foreclosed

Dear Dave,

I’ve been living in a rental house for some time now. I was just told by the owners that the house is being foreclosed on next week. I’ve tried to call and email them, but haven’t heard anything back. Should I go ahead and pay rent for this month?

John

Dear John,

I wouldn’t. The bottom line in a situation like this is: You’re giving them money and they’re not paying the bills. I wouldn’t give the owners another dime until they return your phone calls or talk to you in person and let you know the details as to what’s going on with the house you’re living in.

In the meantime, I’d advise speaking with an attorney and a real estate professional in your area to find out exactly what your rights are at this point. Many places require a 30-day notice before renters are required to vacate a property.

Good luck, John

Dave

• Dave Ramsey is CEO of Ramsey Solutions. He has authored seven best-selling books, including The Total Money Makeover. The Dave Ramsey Show is heard by more than 13 million listeners each week on 585 radio stations and multiple digital platforms. Follow Dave on the web at daveramsey.com and on Twitter at @DaveRamsey.